Labour NHS funding pledge unravels

Labour’s key election pledge to rescue the ailing NHS with an extra £2.5bn a year has begun to unravel after the party admitted that the money would not be available until halfway through the next parliament.

The party has confirmed that none of the £2.5bn pledge, which formed the centrepiece of Ed Miliband’s speech to its conference in Manchester, would be raised in the first year of a Labour government.

Only an unspecified amount would be available in the second year, because Labour would need to steer a budget through parliament and pass legislation before its planned mansion tax, levy on tobacco firms and tax avoidance crackdown would yield any income.

Labour clarified the policy after the Guardian asked Miliband and Ed Balls, the shadow chancellor, for further details of its NHS spending plans for 2015 to 2020.

The disclosure sparked a row, with the coalition parties accusing Labour of deceit and “hypocritical posturing” over an issue it hopes will help it win the general election on 7 May next year.

Labour said last month that its Time to Care Fund would help save and transform the NHS, which is struggling under rising demand and an unprecedented financial squeeze, by giving it an extra £2.5bn a year to recruit 20,000 nurses, 8,000 GPs, 5,000 careworkers and 3,000 midwives.

Miliband did not, however, mention that the policy would take time to phase in and would not produce the £2.5bn until 2017-18, depriving the health service of several billion pounds in the meantime.

“The centrepiece of Labour’s conference now lies in tatters. We have consistently said that the measures Ed Miliband set out wouldn’t raise anything like what he promised and now it’s clear that even the shadow chancellor agrees”, said the health secretary, Jeremy Hunt.

“NHS patients and staff deserve better than dishonesty and hypocritical posturing, which is why we have actually delivered a real-term rise for the NHS this parliament bigger than Labour’s pledge and have said that a Conservative government would continue to protect and increase the budget in the next.”

Norman Lamb, the Liberal Democrat health minister, was also highly critical of Labour’s presentation. “They have been found out. This turns out to be an attempt to deceive people. The policy is less than a fortnight old and it has completely unravelled. How did they think they could get away with it?” he said.

“Labour claim to be the party of the NHS, but you can’t protect the NHS if you can’t manage the economy. Labour haven’t come clean about their NHS funding figures and now the true story is appearing.”

The Conservatives have pledged to continue giving the NHS real-terms increases in its budget throughout the five years of the next parliament. The Liberal Democrats plan to do the same and to give it a further £1bn a year from 2016.

Labour is committed to maintaining the ringfence around Department of Health spending if it wins power, but the party have only clarified their position since Miliband’s 23 September speech, when he failed to mention this issue. That would mean increasing the department’s budget by just over £2bn in the current financial year to £115.1bn in 2015-16.

Sources close to Balls said Labour would take power when the 2015-16 financial year had already started and would need to implement the measures intended to realise the £2.5bn before the money would start coming in.

“Through our Time to Care Fund, we will be able to allocate £2.5bn a year more than the Tory plans we inherit by raising additional revenue from the wealthiest in society,” a Labour spokesman said. “This is additional revenue through measures such as a mansion tax and a levy on tobacco firms which the Conservative party has said it opposes.”

Miliband had made clear that Labour would not borrow more to pay for the extra funding as it would not spend money it did not have, the spokesman added.

Acknowledging the gradual realisation of the hoped-for revenues, he said: “We will introduce these revenue-raising measures at the start of the next parliament, so that revenues are available from the first full financial year of a Labour government. And our aim is to build up the £2.5bn a year fund as quickly as we can in the next parliament.”

Neither of the coalition parties had backed Labour’s extra £2.5bn, he said.

Prof Chris Ham, the chief executive of the King’s Fund health thinktank, called on Labour to clarify its plans.

“NHS leaders need certainty to manage budgets and plan services for patients. Having raised expectations, Labour needs to make clear exactly how much, and when, additional funding will be provided to relieve the unprecedented pressures on NHS budgets.”

Christina McAnea, the head of health at the Unison union, said Labour needed to think carefully about its NHS pledges because it was still the party most trusted on the service. Miliband needed to be ready to give the NHS more money as soon as it takes office, she said.

Rachael Maskell, the head of health at the Unite union, said Labour may be holding back details of the extra money it plans to give the NHS, and that its plan to integrate health and social care services in order to keep people healthier at home, may help save money.

Powered by article was written by Denis Campbell, health correspondent, for The Guardian on Sunday 5th October 2014 19.28 Europe/London © Guardian News and Media Limited 2010